In an important decision regarding multi-jurisdictional class
actions, the Manitoba Court of Appeal (the "Court") in
Meeking v. The Cash Store Inc. et al,.1
confirmed a new presumptive connecting factor for jurisdiction
based on the existence of a "common issue" between
resident and non-resident plaintiffs. The Court also refused
to enforce part of a court-approved settlement in a previous action
against the same defendants on the basis that the notice to class
members was inadequate. In so doing, the Court upheld the
enforceability of multi-jurisdictional class actions, but served
notice to the profession that such actions will only be enforced if
the notices to class members are comprehensive and fair.

History of the Case

Meeking was a proposed class action that was commenced
in Manitoba by a resident of Manitoba against The Cash Store and
Instaloans in respect of allegedly illegal interest rates on short
term loans. The claims asserted in Meeking had
previously been the subject of a class action in Ontario that was
certified and settled.

The certification order in the Ontario action defined the class
as including "any person in Canada, resident outside the
Provinces of British Columbia and Alberta, who borrowed money as a
'payday loan' from a Cash Store location". The
judgment in the Ontario action was slightly different, applying
also to payday loans from Instaloans.

Notice of the Ontario settlement was provided to all known class
members by mail, by posting the notice in each of the Cash
Store's locations in Canada (except locations in B.C. and
Alberta), by referring to the notice in various press releases, by
posting the notice on class counsel's website, by posting the
notice on the Cash Store's website, and by class counsel
providing a copy of it to any person who requested it. The
notice set out the deadlines for class members to opt-out of the
class action, but Mr. Meeking did not opt-out.

When the Meeking action was commenced in Manitoba, the
defendants brought a motion to enforce the court-approved
settlement from Ontario. The plaintiff took the position that the
settlement was not binding on persons in Manitoba because the
notice was inadequate. He claimed that he was not aware of the
settlement as he had not seen the posters in The Cash Store and had
not read the mail that was sent to him by the defendants. He also
argued that the Ontario court did not have jurisdiction with
respect to transactions involving residents of Manitoba.

The Decision of the Motion Judge

The motion judge relied on the Supreme Court of Canada's
decision in Canada Post Corp. v. Lépine2
and held that the prerequisites for enforcement of the Ontario
settlement were: a) that the Ontario court properly assumed
jurisdiction; b) that the principles of order and fairness were met
insofar as Manitoba class members were concerned; and, c) that
there was no statutory or common-law rule precluding
enforcement.

The motion judge held that the Ontario court had properly
assumed jurisdiction because the defendants carried on business in
Ontario. However, the motion judge refused to enforce the
Ontario settlement as it related to loans made by Instaloans, as
well as signature loans and title loans made by The Cash Store,
because the notice with respect to those aspects of the settlement
was inadequate. According to the motion judge, the key
deficiencies in the notice were that: a) the heading of the notice
did not refer to Instaloans specifically; and b) "signature
loans" and "title loans" were not specifically
referred to in the notice. Consequently, the motion judge held that
the Ontario settlement should only be recognized and enforced with
respect to payday loans from The Cash Store.

The defendants and the plaintiffs both appealed.

Manitoba Court of Appeal

(a) Jurisdiction
– New Presumptive Connecting Factor

The Court first considered whether the Ontario court had
properly assumed jurisdiction.

The Court held that the Ontario court properly assumed
jurisdiction over the Ontario defendants on the basis that the
defendants carried on business in Ontario, which is one of the
presumptive connecting factors for assuming jurisdiction set out by
the Supreme Court of Canada in Club Resorts Ltd. v. Van
Breda.3 However, the Court ruled that in this case,
more was required for the Ontario court to assume jurisdiction over
non-residents.

With respect to non-residents, the Court recognized a new
presumptive connecting factor under which the court could assume
jurisdiction over non-resident plaintiffs: the commonality of
issues between the claims of residents and non-residents of the
jurisdiction. The Court held that "where the Court has
jurisdiction over both the defendant and the representative
plaintiff in a class action proceeding, common issues between the
claim of the representative plaintiff and that of non-resident
plaintiffs is a presumptive connecting factor, sufficient to give
the court jurisdiction over non-resident
plaintiffs".4

(b) Notices to Class
Members Must be Comprehensive and Fair

The Court upheld the motion judge's ruling that certain
portions of the Ontario judgment were unenforceable in Manitoba
because the notice was inadequate. The problems with the notice
were: a) Instaloans was not included in the notice heading and
therefore an Instaloans customer would have no need to read the
contents of the notice where a reference to Instaloans might be
made; and b) the notice did not refer to title loans or signature
loans and therefore it would be unfair for the settlement to bind
customers who obtained these types of loans.

Conclusion

This decision is important for a number of reasons. First,
it recognizes the existence of a common issue as a presumptive
connecting factor for the assumption of jurisdiction by the court
over non-residents. Second, it reinforces the importance of
notices to class members and provides guidance with respect to the
steps that must be taken to ensure that multi-jurisdictional class
action settlements will be enforced outside the province in which
they were approved. Lastly, it further confirms that national class
actions commenced in Ontario will be recognized in the proper
circumstances in other provinces. This should come as welcome news
to defendants who do not wish to litigate in multiple provinces, as
well as those seeking finality in their action.

Footnote

1 2013 MBCA 81 [Meeking]

2 2009 SCC 16.

3 2012 SCC 17 [Van Breda].

4 Meeking at para 97

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